PER CURIAM: Charles Dillman, as personal representative of the Estate of
Kenneth Lew Dillman, appeals numerous equitable dist
THIS OPINION
HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT
IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.
THE STATE OF SOUTH CAROLINA
In The Court of Appeals
Cheryl Moyer Dillman,
Respondent,
v.
Mitchell Foy Dillman, personal representative for the Estate of Kenneth
Lew Dillman, Appellant.
Appeal From Beaufort County
Alvin D. Johnson, Family Court Judge
Unpublished Opinion No. 2004-UP-322
Heard March 11, 2004 Filed May 14,
2004
AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED
John S. Nichols, of Columbia and William Randall Phipps, of
Hilton Head Island, for Appellant.
Patrick James Thomas Kelley, of Bluffton, for Respondent.
PER CURIAM: In this domestic action, Mitchell
Foy Dillman (Estate), as personal representative of the Estate of Kenneth Lew
Dillman (Husband) [1] , alleges
numerous errors in the family courts order on equitable distribution, the alimony
award, and attorneys fee award in favor of Cheryl Moyer Dillman (Wife). We
affirm in part, reverse in part, and remand.
FACTS
Husband and Wife were married in Switzerland on
October 8, 1989, and were remarried three days later in the United States.
Prior to their marriage, they purchased a lot on Hilton Head Island. The deed
conveyed a two-thirds interest to Wife and the remaining one-third to Husband.
They later built a house on this lot and Wife paid $364,000 of the $443,000
total cost of the land and construction. In February 1993, Wife conveyed one-sixth
of her interest to Husband, thereby vesting each with an undivided one-half
interest in the property.
In December 1991, Wife loaned Husband money taken
from her life insurance policies and funds from her investment account. Husband
used the funds to satisfy outstanding mortgages on two quad lots in an apartment
complex he owned in Hinesville, Georgia (Hinesville Apartments). [2] Wife received notes and mortgages
on the two lots as security for the loan. Both parties agreed Husband had significantly
paid down the notes at the time of trial but disagreed as to the remaining balance
due.
Early in 1994, Husband borrowed a substantial sum
from a bank, which he secured by a mortgage encumbering the couples Hilton
Head Island home. He used approximately two-thirds of the proceeds of the loan
to satisfy mortgages on five more quad lots at his Hinesville Apartments, and
deposited the remaining amount into his personal securities account. By the
time of the final hearing in family court, Husband had repaid the entire amount
due on this loan.
In September 1995, Wife loaned Husband $30,000 from
her Merrill Lynch checking account. Husband combined these loan proceeds with
personal funds to purchase a lot in Sun City, Hilton Head, in March 1996. Both
parties testified Husband repaid at least $15,730 of the loan just prior to
purchasing the property.
In June 1999, Wife became suspicious that Husband was
having an extramarital affair after discovering notes written to him by a woman
the couple had met while vacationing in France. Husband had taken a trip without
Wife at the time and place discussed in the notes. Upon his return, Wife discovered
a used prophylactic in the garbage. Husband denied he and the woman traveled
together and claimed he shared his hotel room with a gentleman he met on the
tennis courts. Wife testified Husbands extramarital affair was the cause of
the breakup of their marriage, but Husband claimed the marriage had broken down
prior to his involvement with the other woman.
In September 1999, Wife brought this action for divorce,
seeking equitable distribution of marital property, separate maintenance and
support, and attorneys fees. Both parties requested their antenuptial agreement
be recognized for purposes of equitable distribution.
[3] However, after reviewing the agreement, the family court ruled the
agreement was void, a ruling neither party appealed. The court bifurcated the
trial, granting Wife a divorce, and reserving all other issues for a later hearing.
At that hearing, the court divided the marital assets, awarded Wife alimony
of $1,000 per month, issued a mutual restraining order, and required Husband
to pay $20,000 of Wifes attorneys fees. The order permitted a termination
of alimony only in the event of Wifes death or remarriage, not providing for
the eventuality of Husbands death.
SCOPE
OF REVIEW
When reviewing
an appeal from the family court, we have the authority to find facts in accordance
with our own view of the preponderance of the evidence. We are not, however,
required to disregard the findings of the judge, who saw and heard the witnesses
and was in a better position to evaluate their credibility and assign comparative
weight to their testimony. Widman v. Widman, 348 S.C. 97, 109-110, 557
S.E.2d 693, 699-700 (Ct. App. 2001) (internal citations omitted).
LAW/ANALYSIS
I. Equitable
Distribution Issues
A. Failure to Consider Statutory Factors
The estate asserts several errors
regarding the family courts findings and rulings on equitable distribution,
among them contending the court failed to weigh the various factors contained
in the statute [4] by failing
to consider the existence of an antenuptial agreement and essentially ignoring
the manner in which the parties conducted their financial affairs during the
marriage. We disagree.
The statute lists the factors the family
court must consider when making an equitable distribution award and vests the
court with the discretion to determine the weight to be assigned each factor.
S.C. Code Ann. § 20-7-472 (Supp. 2003). Contrary to the estates allegations,
we find the court adequately considered the relevant factors and addressed them
sufficiently in the final order so that this court is able to conclude it was
fully cognizant of them. See Jenkins v. Jenkins, 345 S.C. 88,
100, 545 S.E.2d 531, 537 (Ct. App. 2001) (citing Doe v. Doe, 324 S.C.
492, 502, 478 S.E.2d 854, 859 (Ct. App. 1996)). As an appellate function, this
court looks to the overall fairness of the apportionment, and if the result
is equitable, taken as a whole, that this court might have weighed specific
factors differently than the family court is irrelevant. Bowers v. Bowers,
349 S.C. 85, 97, 561 S.E.2d 610, 616 (Ct. App. 2002).
As to the antenuptial agreement, while it may provide
evidence of the intention of the parties initially, it is not controlling because
the prior order of the family court declared it void and there has been no appeal
of that ruling. Greenville County v. Kenwood Enters., Inc., 353 S.C.
157, 173, 577 S.E.2d 428, 436 (2003) (holding any unappealed portion of the
trial courts judgment is the law of the case and must therefore be affirmed).
B. Marital Fault
The estate further complains the court erred
by concluding Husbands involvement with another woman contributed to the breakup
of the marriage and in considering such when making its award. We disagree.
The estate does not challenge the courts
conclusion that Husband was involved with another woman, but rather argues the
marriage was irretrievably broken prior to any involvement. The evidence, however,
amply demonstrates Husband was corresponding with and secretly meeting the other
woman prior to the parties divorce, and Wife testified that Husbands infidelity
contributed to the breakup of the marriage. The family court found that Husbands
explanations for his behavior lacked credibility. Accordingly, the court appropriately
considered Husbands fault in its final order. S.C. Code § 20-7-472(2).
C. Marital Home
The estate complains the court erred by awarding Husband
only a 20 percent interest in the marital home, arguing the court devalued his
sweat equity and in-kind contributions made pursuant to a 5-year plan he alleges
existed. We disagree.
The court found Wife directly contributed
a significantly greater portion of the cost of the house and land, Husbands
direct contribution was minimal, and the parties indirect contributions were
essentially equal. The estate asserts the court failed to properly weigh Husbands
efforts as general contractor during construction and, later, his responsibilities
of running the household. Husband relied heavily on a so-called 5-year plan
contained in a document which Wife denied ever agreeing to. We discern no abuse
of discretion in the courts decision concerning the marital home. Ball
v. Ball, 314 S.C. 445, 448, 445 S.E.2d 449, 451 (1994) (the family court
has wide discretion in determining the contributions made by each spouse to
the marital estate).
The estate also complains about various other
provisions of the court order relating to the marital home, including the value
placed on it by the court allowing a 7 percent reduction in its valuation in
the event Wife chose to buy Husbands interest, in requiring a public auction
in the event the parties could not agree to sell the house on the open market,
and in making Wife responsible for any mortgage payment when there was none.
The appraisal the court accepted was the one prepared closest to the date of
the filing of the pleadings, and because a private sale would involve a real
estate commission, it was not erroneous for the court to authorize a reduction
in the appraisal by a reasonable real estate commission if Wife chose to buy
Husbands interest. The courts order on these points was well within its discretion.
S.C. Code Ann. § 20-7-476 (Supp. 2003) (The court in making an equitable apportionment
may order the public or private sale of all or any portion of marital property
upon terms it determines.).
D. Treatment of Other Assets
The estate asserts the family court erred
in identifying two units at Cotton Hope Plantation, a lot in Sun City, and Husbands
Merrill Lynch and AmeriTrade accounts as marital assets. We disagree.
The estate initially argues Husband provided
almost all the funds for the purchase of the units in Cotton Hope Plantation
and the lot in Sun City. However, these were assets acquired during the course
of the marriage and are therefore considered to be marital property which, by
definition, includes all real and personal property which has been acquired
by the parties during the marriage and which is owned as of the date of filing
or commencement of marital litigation. S.C. Code Ann. § 20-7-473 (Supp. 2003).
No question of transmutation exists with regard to these assets because they
were not owned by Husband prior to the marriage. Additionally, there is considerable
credible evidence these assets were acquired with substantial funds of both
parties which were commingled. Also, the AmeriTrade account was opened during
the course of the marriage and was funded by the Merrill Lynch account which,
as discussed below, was transmuted into marital property. Consequently, it
is also a marital asset subject to apportionment by the family court.
Husband did open the Merrill Lynch account
prior to the marriage. However, there was evidence that during the course of
the marriage Husband made several principal contributions from the parties
joint funds. There was also testimony that Husband deposited monies from the
building account maintained by the parties for the marital residence into the
Merrill Lynch account. Husband offered no record of deposits and disbursements
for this account. We therefore conclude there was evidence of significant commingling
of marital funds unto this account and, as a result, the account was transmuted
into a marital asset subject to apportionment. See Hussey v. Hussey,
280 S.C. 418, 423, 312 S.E.2d 267, 270 (Ct. App. 1984) (holding nonmarital property
can become transmuted into marital property when it becomes so commingled as
to be untraceable).
II. Transmutation
of Hinesville Apartments
The estate argues the family court erred
by holding the totality of Husbands Hinesville Apartments had been transmuted
into marital property and by granting Wife a 30 percent equity interest therein.
We agree.
Husband acquired the Hinesville Apartments prior to
the marriage. In December 1991, Wife borrowed $158,000 against her life insurance
policies and loaned the proceeds plus a check drawn on her Merrill Lynch account
for $7,750 to Husband. Husband used the $165,750 to satisfy outstanding mortgages
only on quad lots 7 and 9. Husband executed two $82,875 promissory notes with
mortgages on those two quads in favor of Wife as security for the loan. Each
note had a variable rate calculated to be one percent above the rate paid by
Wife. Husband claimed he paid down the notes to a balance of $81,587 as of
March 1, 2001 and was current with his payments. At trial, Wife agreed Husband
was current with his payments at the time, but testified he had previously been
behind and late charges accrued increasing the total outstanding balance on
the notes to $97,485.26 as of December 6, 2002.
Husband also executed a note for $203,000 secured
by the parties Hilton Head Island home and used $176,457.94 of the loan proceeds
to satisfy mortgages on quad lots 3, 4, 5, 6 and 8. He deposited the remaining
amount into his Merrill Lynch securities account. Husband repaid the entire
amount due under the note as of the date of the final hearing.
Nonmarital property may be transmuted only if it
is utilized in support of the marriage, becomes so commingled as to be untraceable,
or is utilized in such a manner as to evidence intent to make it marital. Wyatt
v. Wyatt, 293 S.C. 495, 497, 361 S.E.2d 777, 779 (Ct. App. 1987). None
of these requirements exist with regard to Husbands Hinesville properties.
Husband held the properties solely in his own name, and the income was paid
exclusively to him. The funds utilized by Husband to pay the existing mortgages
were acquired in arms-length transactions evidenced by notes and secured by
mortgages. The loan secured by a mortgage on the marital residence had been
fully repaid at the time of the final hearing. Wifes own testimony was to
the effect that she would not have loaned Husband the money to satisfy the existing
mortgage had she not received security for her loan. The evidence is that Husband
made regular payments pursuant to the terms of the note. There is no evidence
either party intended at the time of that transaction to transmute the apartments
into marital property. We therefore reverse the portions of the family courts
order holding the apartments have been transmuted and equitably dividing them.
We also reverse the portion of the order requiring sale of the properties and
forgiveness of the balance of the debt to Wife secured by the properties. The
estate remains liable for the outstanding balance due on the note. Because
the parties disagree as to the remaining balance, this issue is remanded to
the family court to determine the exact amount due.
III. Alimony
The estate complains of numerous errors in
the family courts order on the subject of alimony. Most significantly, it
asserts the court erred by failing to order alimony payments to cease at Husbands
death. We agree this omission was error.
S.C. Code
Ann. § 20-3-130 (B)(1) (Supp. 2003) requires that periodic alimony terminate
on the remarriage of the supported spouse or upon the death of either spouse.
As Husband has died, Wife is not entitled to any further alimony.
IV.
Attorneys Fees
The estate
contends the family court erred by ordering Husband to contribute $20,000 towards
Wifes attorneys fees. We disagree.
The estate
argues that we should reverse the family courts award of attorneys fees to
Wife if we conclude Husband is successful in his appeal. The court will reverse
the award of attorneys fees where the substantive results achieved by a partys
counsel are reversed on appeal. See, e.g., E.D.M. v. T.A.M.,
307 S.C. 471, 477, 415 S.E.2d 812, 816 (1992). In this case, we affirm a majority
of the family courts order and reverse only as to the transmutation and apportionment
of the Hinesville Apartments and require the termination of alimony in accordance
with statutory authority. The remainder of the order accrues to the benefit
of Wife. Accordingly, we find the award of fees to her was proper.
CONCLUSION
We reverse those portions of the family courts order transmuting
and apportioning Husbands Hinesville apartments, require his estate to satisfy
the remaining balance due on the notes on quads 7 and 9, and remand for the
court to determine the correct amount. We also find Wife is no longer entitled
to alimony. We affirm the family courts order as to the remaining issues.
AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED.
HUFF and STILWELL, JJ., and CURETON, A.J.,
concur.
[1] Husband died during the pendency of this appeal. His son,
Mitchell Foy Dillman, was named personal representative of his estate.
[2] Prior to the marriage, Husband acquired 7 individual quads
(freestanding rental units each containing four apartments) and five townhouses
(all located on a single lot) in Hinesville, Georgia. The quads are identified
as lots 3 through 9, and the townhouses are identified collectively as lot
10.
[3] Because both parties already had considerable assets they
entered into an agreement approximately one month before the marriage stating
their intentions that their respective children, rather than one another,
should receive their premarital holdings.
[4] S.C. Code Ann. § 20-7-472 (Supp. 2003).